S. Environmental Issues in Business Transactions

Environmental laws have far-reaching consequences in the business world. Corporations incur enormous costs complying with environmental requirements, remediating contaminated properties and defending toxic tort litigation. Complying with environmental requirements frequently affects the ability of corporations to operate effectively and profitably, expand or modify operations and meet financial projections. Environmental costs and liabilities can affect stock value and the cost of capital, and influence corporate structures and decision-making on a wide range of business issues seemingly unrelated to environmental protection. Consequently, environmental liability is also a substantial concern for U.S. and international financial institutions.

This seminar explores how environmental laws affect a variety of business transactions, including mergers and acquisitions, securities offerings, lending and secured transactions and real estate development (involving virtually every industry, from heavy manufacturing to internet commerce). Students will examine how environmental liabilities and risks are identified, evaluated and allocated in corporate transactions and discuss the regulatory, market and political forces at play in this context. Students also will have the opportunity to reflect upon the relative effectiveness of governments and capital markets as environmental regulators.

In addition, the seminar also will give students an opportunity to closely review, and negotiate, operative contracts (e.g., asset and stock purchase agreements, credit agreements and lease agreements) derived from actual transactions, as well as securities offering disclosure language that complies with applicable SEC reporting rules. Over the course of the semester, students will be presented with a hypothetical transaction and will have an opportunity to analyze, discuss and draft brief client notes on tactics and strategies for addressing real-life business risks presented by the contemplated deal. At the end of the semester, students will participate in a mock negotiation exercise at the offices of Cravath, Swaine & Moore LLP or Allen & Overy LLP to finalize the terms of the deal. Course grades will be based on participation in class discussions and mock exercises and a take-home exam.